Psst. Hey, you. Yeah, you. We are speaking on behalf of the universe with a message for you:
You are not charging enough.
Honestly, we could just end the article here but there are minimum word counts to hit so in a moment we’re going to give you a few reasons why you need to raise your fees, though you don’t need them. Crazy concept, right? You can just raise your fees. Period, end of sentence, mic drop. Just raise them. Hit the back button on your browser right now and go read some accounting gossip elsewhere on this site because you do not need a reason to raise your fees.
That idea sounds better on paper than in real life, of course. In real life, you would have raised your fees already a year ago if it were as simple as just raising them. Maybe you are waiting for someone to give you permission to. In which case, you have our permission. That was easy, wasn’t it?
Ugh. You’re still not ready to do it, are you?
We are not going to waste precious word count on the economic reasons behind raising your fees, you already know what they are. But despite having no idea who you are – yes, you reading this right now – we can guess with some authority that you are undercharging. No, the Going Concern editorial desk is not staffed by clairvoyants (sadly. Those people all work for Accounting Today). We know you are undercharging because pretty much everyone is, or at least was up until recently.
Maybe it’s accountants’ nature to want to appease clients and undercut their own talents because so few people appreciate them. You know that you know your stuff, you know the hard work you put in on your education and your certifications and all that time you spend reading up on new regulations and best practices. Guess what, clients don’t care. Which is fine, we aren’t asking clients to perform an elaborate economic analysis on your worth and thank goodness we aren’t because we know clients would undervalue you even worse than you undervalue yourself. Not only are they terrible at valuation, they don’t even know what exactly you do. Imagine the anarchy if we let clients set their own fees.
Raising your fees is something you’ve been thinking about for a while. You know you should, and you know that you’re justified to do so. But something is holding you back, be it fear or anxiety or an allergy to serious conversations with clients. We get it.
Take a second to think about a few reasons why you should charge more. And if you can’t come up with enough reasons, here are some more.
You have been undercharging for a long time
By now you’ve heard about – and experienced – the accountant shortage. If you have been living under a rock for two years (welcome back to civilization btw) the TL;DR is that interest in the accounting profession has been waning for years and demand for accountants remains higher than the supply of accounting graduates can satisfy.
The profession’s greatest minds are working harder than an associate during busy season to understand why this is happening and what can be done to fix it. Salary – specifically, starting salaries that can’t compete with other white collar fields – is a factor that comes up more often than not. At issue, for many years public accounting firms did not raise starting salaries like they should have and with each passing year, public accounting became less and less attractive to college students. There’s an argument to be made here about accounting as a recession-proof career and the myriad of opportunities offered to you when you have CPA after your name and paying your dues blah blah blah, we aren’t talking about that because that’s not what we’re here to convince you of.
While new graduate salaries were stagnating, so were your fees. Year after year you did not raise your fees because your practice was thriving and you didn’t think you needed to or you were afraid of losing clients if you did or you worried that #TaxTwitter would talk about you behind your back for being a money-grubbing jerk. Whatever your reasons, because you haven’t raised your fees incrementally over time you now find yourself in a position similar to that of gargantuan public accounting firms: you now have to raise fees and perhaps significantly.
Accountants are like toilet paper and other terrible metaphors
Circling back to a couple paragraphs ago, there is currently a critical accountant shortage. This means that smaller clients especially are having trouble even finding accountants. If you still remember what you learned in Econ 101, you know that high demand and low supply has a direct effect on prices. You are in high demand. Think of yourself like toilet paper in 2020. You are toilet paper. Wow, that’s a terrible metaphor. OK, think of yourself like a PS5 the day it was released. You are a PS5. Ugh, that one is pretty dumb too. Got it! Think of yourself like a diamond. You are a diamond.
There are many gemstones that rival or even surpass diamonds in beauty yet diamonds are a highly sought-after stone due to rarity. Granted, the rarity is completely manufactured and they aren’t actually as rare as diamond sellers would want you to believe (fun fact: it’s estimated there are 1,000,000,000,000,000 tons of rough diamonds hidden beneath the Earth) but we can’t possibly hamfist another metaphor in here, we’re just going to go with diamonds.
The high demand for accounting services makes those services much more valuable than they would be if there were 1,000,000,000,000,000 tons of accountants. We’re not saying you should jack up your prices just because you can, rather we are reminding you that you provide a valuable service in a non-saturated market.
Your competitors are already doing it
Your competitors don’t need to read this article because they have already raised their fees. They’re off somewhere else on the site reading old Big 4 farewell emails with lots of expletives in them from 2011. Your competitors already completed the analysis you are doing right now. They scribbled out the pros and the cons, read the practice management articles that explain why fees should be raised and how to delicately approach the issue with clients, and gave themselves a pep talk in the mirror like a Sim raising their charisma points. Then they did it.
#TaxTwitter is full of people who are thinking about raising fees, in the process of doing so, or have done so and regret nothing. When you finish this article, go over there and see for yourself.
Clients are much more amenable than you think
Although they may not always express appreciation for your skills and everything you do for them, clients are pretty reasonable (most of the time) and do value what you provide for them. Not as much as they should, but enough that a fee increase won’t automatically scare them away.
…And if they aren’t, who cares
Will you lose clients if you raise your fees? Maybe. And so what if you do? Know that those clients will then seek out other practitioners – many of whom have raised their fees, remember – and find out that the other accountants are charging as much if not more than you. Many accountants aren’t accepting new clients. Some of them immediately blacklist any potential clients who say “I fired my last accountant when they raised fees” and refuse to work with someone like that. There aren’t a quadrillion accountants sitting on the bench eager for Coach to put them in on tax returns (see above re: supply and demand), clients are feeling the accountant shortage just like everyone else.
One last thing
Remember the old SNL skit Daily Affirmation? I’m good enough, I’m smart enough, and doggone it, people like me.
Channel that next time you are questioning your worth. Just do it less awkwardly than ole Stuart up there.
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